Peloton targeted for takeover by tech giant, sportswear brand – reports
Tech giant Amazon and sportswear brand Nike are considering making separate bids for the struggling American home workout brand, Peloton, according to reports in the Financial Times and Wall Street Journal on Friday. The brand has seen sales dwindle and its share price collapse in the past 12 months.
The New York-based firm, whose sales of exercise bikes and treadmills soared during Covid lockdowns, is unsure whether it would accept any offers.
Amazon decline to confirm if a bid for Peloton was being considered. “We don't comment on rumours and speculation,” a spokesperson told the BBC on Monday. Neither Pelton or Nike have commented on the speculation.
Peloton’s fortunes have changed for the worst over the last 12 months after a promising 2020 when people were confined to their homes for months on end and gyms were closed due to the pandemic.
With appetite for its bikes and treadmills dwindling, Peloton’s market value collapsed from nearly $50 billion 12 months ago to less than $8 billion last week.
In August the firm reported that its losses had widened as revenue growth slowed. It also announced that it would be cutting the price of its flagship bike by 20% to $1,495 (£1,105).
That same month, the US Department of Justice and the Department of Homeland Security announced an investigation into the firm, after a child was pulled under one of its treadmills and was killed.
Pelton warned in November that it expected revenue growth to slow further into 2022. “The primary drivers of our reduced forecast are a more pronounced tapering of demand related to the ongoing opening of the economy, and a richer than anticipated mix of sales to our original bike,” it said in a recent letter to shareholders.
The brand endured a turbulent winter as Mr. Big, a character from HBOs ‘Sex and the City’ and its sequel series ‘And Just Like That,’ was killed off after a Peloton workout, sending shares plunging. Peloton responded with an advert, featuring Mr. Big actor, Chris Noth, in which it emerged that he had not died, but run off with a mistress.
The advert was later pulled following two claims of historic sexual assault made against Noth.
Peloton’s share price jumped in after-hours trading on Friday following reports that bids may be incoming.
